Never mind the size of the write-down, feel the conservatism of the accounting. That was the pitch from UBS yesterday as the Swiss bank found itself with the dubious distinction of being the bank with the second-biggest loss related to sub-prime US mortgages.

Amazingly, UBS found a receptive audience. Its shares gained as $10bn was added to its previous estimate of sub-prime losses from $3.4bn. That estimate was only two months old. An outsider might ask why, if UBS didn't know what was going on October, its numbers should be trusted now.

The answer, it seems, is that some serious financial institutions have been persuaded that the picture is as bleak as it will get. So the Singapore government and a Middle Eastern investor that prefers anonymity (this is Switzerland) are putting up $11.5bn.

Good luck to them: they are investing in a bank that perpetually finds itself at the heart of great financial cock-ups. Last time it was Long-Term Capital Management, the hedge fund that blew up in 1998. Conservatism after the catastrophe is one thing; if UBS actually lived by its supposed caution it wouldn't get into these scrapes in the first place.

The price UBS investors are paying is extraordinary: their dividend will be paid in shares, not cash; previously cancelled shares will be reissued; and the Singaporeans and their unnamed co-travellers could end up owning 12% of the bank. Every sinew is being strained to avoid a rights issue or a dividend cut. In reality, it's still a $17bn fund-raising.

In the circumstances, don't count on yesterday's warm market reaction being the final word. Yes, it's reassuring that, as at Citigroup, overseas investors are prepared to send bundles of cash to support the west's banking system. But no, it's not reassuring that a loss of $3.4bn can become $13.4bn so quickly. It suggests other banks will have to revisit their sub-prime exposures and that the bad news will flow for months yet.

Rio grand

Anything seems possible in the mining industry these days, but a break-up bid for Rio Tinto?

Blackstone, the US private equity group, distanced itself from the idea yesterday, but that may not be the end of the matter. Every small piece of news from China - where local steelmakers are up in arms about the prospect of a BHP Billiton bid for Rio - is taken as evidence of plans being drawn up.

We will discover today if the suspension of trading in the shares of Baosteel, China's biggest steelmaker, is a red herring or not, but it's worth considering what it would take to consume Rio.

For a start, the price would have to beat anything that BHP, which has its eye on synergies, could offer. It would have to satisfy the Australian government, which is probably even more protectionist than it was when it blocked Shell's bid for local oil group Woodside.

An outsider, like a Blackstone-China consortium, would also have to pay cash. Raising $200bn in today's markets would be next to impossible, surely. If the plan was to break Rio into pieces, the buyer would be taking an immense bet that metals prices stay firm.

So are the rumours just fanciful? Who knows, but it's very helpful for Rio that sky-high valuations are being thrown around. BHP is struggling to be heard.

The collier to watch

We spent last year getting used to the idea that UK Coal, the country's largest coal producer, should be valued as a property stock rather than a miner. The notion was not so silly because the company thinks its property and land could be worth £900m in 2012 if it wins various planning consents to redevelop 50,000 brownfield acres. It also did wonders for the share price, which jumped from 200p to 600p.

It is now nearer 400p, thanks to falling values of commercial property, so yesterday was a good day for UK Coal to remind us that it is still in the business of digging for the black stuff. A deal to supply EDF Energy with 4m tonnes from 2009 to 2012 extends the life of the Thoresby colliery in Nottinghamshire and saves 500 jobs.

Investors are more interested in the financials since the EDF deal, like two others in recent months, is best viewed as part of UK Coal's liberation from fixed-price contracts it signed years ago when the price of coal was on the floor.

Few hard numbers are available, but we may guess that yesterday's deal, given that the spot price of coal has doubled in the past year, has a present value of at least £100m. At a company with a market value of £650m, that's chunky. Whichever way you view UK Coal - as a miner with a property kicker, or vice versa - it looks undervalued.